1. The Committee on Rules of Origin and Customs-Related Matters established pursuant to Article 22.3 (hereinafter referred to in this Chapter as "the Committee") shall be responsible for the effective implementation and operation of this Chapter and the customs-related matters of Chapter 2 and of Article 14.51, in addition to the other responsibilities specified in paragraph 1 of Article 3.28. (16)
2. The Committee shall hold joint meetings with the Joint Customs Co-operation Committee (hereinafter referred to in this Chapter as "the JCCC") established pursuant to the CMAA, unless such joint meetings are not necessary to ensure consistency in the implementation and operation of the provisions referred to in paragraph 1 and in the CMAA. (17)
3. The Parties shall ensure that the composition of their delegations to meetings of the Committee corresponds to the agenda items.
4. Without prejudice to the functions of the JCCC, the Committee shall have the following functions:
(a) addressing all issues arising from the implementation and operation of the provisions referred to in paragraph 1;
(b) identifying areas for improvement in the implementation and operation of the provisions referred to in paragraph 1;
(c) functioning as a mechanism to expeditiously reach mutually agreed solutions with regard to any matters covered by the provisions referred to in paragraph 1;
(d) formulating resolutions, recommendations or opinions regarding actions or measures which it considers necessary for the attainment of the objectives and effective functioning of this Chapter;
(e) deciding on the actions to be taken or the measures to be implemented by a Party or the Parties, in the areas referred to in paragraph 2 of Article 4.12, which it considers necessary for the attainment of the objectives and effective functioning of this Chapter; and
(f) carrying out other functions as may be delegated by the Joint Committee pursuant to subparagraph 5(b) of Article 22.1.
Chapter 5. TRADE REMEDIES
Section A. General Provisions
Article 5.1. Definitions
For the purposes of this Chapter:
(a) "domestic industry" means the producers as a whole of the like or directly competitive goods operating in a Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;
(b) "serious injury" means a significant overall impairment in the position of a domestic industry;
(c) "threat of serious injury" means serious injury that is clearly imminent in accordance with the investigation referred to in paragraph 3 of Article 5.4. A determination of the existence of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility; and
(d) "transition period" means, in relation to a particular originating good, the period beginning on the date of entry into force of this Agreement and ending 10 years after the date of completion of tariff reduction or elimination on that good in accordance with Annex 2-A.
Section B. Bilateral Safeguard Measures
Article 5.2. Application of Bilateral Safeguard Measures
1. If, as a result of the elimination or reduction of a customs duty in accordance with Article 2.8, an originating good from one Party is being imported into the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry, the other Party may adopt the measures provided for in paragraph 2 to the extent necessary to prevent or remedy the serious injury to the domestic industry of the other Party and to facilitate the adjustment of the domestic industry.
2. Bilateral safeguard measure may consist of:
(a) the suspension of any further reduction of the rate of customs duty on the originating good provided for in Chapter 2; or
(b) the increase of the rate of customs duty on the originating good to a level not exceeding the lesser of:
(i) most-favoured-nation applied rate of customs duty in effect on the day when the bilateral safeguard measure is applied; and
(ii) most-favoured-nation applied rate of customs duty in effect on the day immediately preceding the date of entry into force of this Agreement.
Article 5.3. Conditions and Limitations
1. No bilateral safeguard measure shall be maintained except to the extent and for such period of time as may be necessary to prevent or remedy serious injury and to facilitate the adjustment of the domestic industry, provided that such period of time shall not exceed a period of two years. However, a bilateral safeguard measure may be extended, provided that the total duration of the bilateral safeguard measure, including such extensions, shall not exceed four years.
2. Bilateral safeguard measures may only be applied during the transition period.
3. In order to facilitate adjustment in a situation where the expected duration of a bilateral safeguard measure exceeds one year, the Party maintaining the bilateral safeguard measure shall progressively liberalise the bilateral safeguard measure at regular intervals during the period of application.
4. No bilateral safeguard measure shall be applied to the import of a particular originating good which has already been subject to such a bilateral safeguard measure for a period of time equal to the duration of the previous bilateral safeguard measure or one year, whichever is longer.
5. Upon the termination of a bilateral safeguard measure, the rate of customs duty for the originating good subject to the measure shall be the rate which would have been in effect but for the bilateral safeguard measure.
Article 5.4. Investigation
1. A Party may apply a bilateral safeguard measure only after an investigation has been carried out by its competent authority (18) in accordance with the same procedures as those provided for in Article 3 and subparagraph 2(c) of Article 4 of the Agreement on Safeguards.
2. The investigation shall in all cases be completed within one year following its date of initiation.
3. In the investigation to determine whether the increased imports of an originating good have caused or are threatening to cause serious injury to a domestic industry, the competent authority which carries out the investigation shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that domestic industry. Those factors include, in particular, the rate and amount of the increase in imports of the originating good in absolute and relative terms, the share of the domestic market taken by the increased imports of the originating good, and the changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment.
4. The determination that increased imports of an originating good have caused or are threatening to cause serious injury to a domestic industry shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of a causal link between the increased imports of the originating good and the serious injury or threat of serious injury to the domestic industry. In this determination, factors other than the increased imports of the originating good which are also causing injury to the domestic industry at the same time shall be taken into consideration.
Article 5.5. Notification
1. A Party shall immediately notify the other Party in writing when it:
(a) initiates an investigation referred to in paragraph 1 of Article 5.4 relating to serious injury, or threat of serious injury, and the reasons for it;
(b) makes a finding of serious injury, or threat of serious injury, caused by increased imports; and
(c) takes a decision to apply or extend a bilateral safeguard measure.
2. The notifying Party referred to in paragraph 1 shall provide the other Party with all pertinent information, which shall include:
(a) in the case of a notification referred to in subparagraph 1(a), the reason for the initiation of the investigation, a precise description of the originating good subject to the investigation and its subheading under the Harmonized System, the expected duration of the investigation and the date of initiation of the investigation; and
(b) in the case of a notification referred to in subparagraphs 1(b) and (c), evidence of serious injury or threat of serious injury caused by the increased imports of the originating good, a precise description of the originating good subject to the proposed bilateral safeguard measure and its subheading under the Harmonized System, a precise description of the proposed bilateral safeguard measure, and the proposed date of the introduction and expected duration of the bilateral safeguard measure.
Article 5.6. Consultations and Compensations
1. A Party proposing to apply or extend a bilateral safeguard measure shall provide adequate opportunity for prior consultations with the other Party with a view to reviewing the information arising from the investigation referred to in paragraph 1 of Article 5.4, exchanging views on the bilateral safeguard measure and reaching an agreement on compensation as provided for in this Article.
2. A Party proposing to apply or extend a bilateral safeguard measure shall provide the other Party with mutually agreed adequate means of trade compensation in the form of concessions of customs duties, the value of which is substantially equivalent to that of the additional customs duties expected to result from the bilateral safeguard measure.
3. If the Parties are unable to agree on the compensation within 30 days after the commencement of the consultations, the Party to whose originating good the bilateral safeguard measure is applied shall be free to suspend the application of concessions of customs duties under this Agreement, the value of which is substantially equivalent to that of the additional customs duties resulting from the bilateral safeguard measure. The Party exercising the right of suspension may suspend the application of concessions of customs duties only for the minimum period necessary to achieve the substantially equivalent effects and only while the bilateral safeguard measure is maintained.
4. Notwithstanding paragraph 3, the right of suspension referred to in that paragraph shall not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the bilateral safeguard measure has been taken as a result of an absolute increase in imports and that such a safeguard measure conforms to the provisions of this Agreement.
Article 5.7. Provisional Bilateral Safeguard Measures
1. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may apply a provisional bilateral safeguard measure, which shall take the form of a measure set out in subparagraph 2(a) or (b) of Article 5.2, pursuant to a preliminary determination that there is clear evidence that increased imports of an originating good of the other Party have caused or are threatening to cause serious injury to a domestic industry of the Party proposing to apply the provisional bilateral safeguard measure.
2. A Party shall notify the other Party in writing of its proposed provisional bilateral safeguard measure no later than at the date of application thereof. Consultations between the Parties on the application of the provisional bilateral safeguard measure shall be initiated immediately after the provisional bilateral safeguard measure is applied. The notification shall contain evidence of the existence of critical circumstances, evidence of serious injury or threat of serious injury caused by the increased imports of the originating good, a precise description of the originating good subject to the proposed provisional bilateral safeguard measure and its subheading under the Harmonized System, and a precise description of the proposed provisional bilateral safeguard measure.
3. The duration of a provisional bilateral safeguard measure shall not exceed 200 days. During that period, the pertinent requirements of Article 5.4 shall be met. The duration of the provisional bilateral safeguard measure shall be counted as part of the period referred to in paragraph 1 of Article 5.3.
4. Paragraph 5 of Article 5.3 shall apply, mutatis mutandis, to a provisional bilateral safeguard measure. The customs duty imposed as a result of the provisional bilateral safeguard measure shall be refunded if the subsequent investigation referred to in paragraph 1 of Article 5.4 does not determine that the increased imports of the originating good subject to the provisional bilateral safeguard measure have caused or threatened to cause serious injury to a domestic industry.
Article 5.8. Miscellaneous
The notifications referred to in paragraph 1 of Article 5.5 and paragraph 2 of Article 5.7 and any other communication between the Parties under this Section shall be made in English.
Section C. Global Safeguard Measures
Article 5.9. General Provisions
1. Nothing in this Chapter shall prevent a Party from applying safeguard measures to an originating good of the other Party in accordance with Article XIX of GATT 1994 and the Agreement on Safeguards.
2. The provisions of this Section shall not be subject to dispute settlement under Chapter 21.
Article 5.10. Application of Safeguard Measures
A Party shall not apply or maintain, with respect to the same good, at the same time:
(a) a bilateral safeguard measure set out in Section B;
(b) a measure under Article XIX of GATT 1994 and the Agreement on Safeguards ; or
(c) a safeguard measure set out in Section C of Part 3 of Annex 2-A
Section D. Anti-dumping and Countervailing Measures
Article 5.11. General Provisions
1. The Parties maintain their rights and obligations under the Agreement on Anti-Dumping and the SCM Agreement.
2. The provisions of this Section shall not be subject to dispute settlement under Chapter 21.
3. Chapter 3 shall not apply to anti-dumping and countervailing measures under this Agreement.
Article 5.12. Transparency and Disclosure of Essential Facts
1. Each Party shall conduct anti-dumping and countervailing duty investigations in a fair and transparent manner, and based on the Agreement on Anti-Dumping and the SCM Agreement.
2. Each Party shall ensure, before or immediately after any imposition of provisional measures referred to in Article 7 of the Agreement on Anti-Dumping and Article 17 of the SCM Agreement, and in any case before a final determination is made, full disclosure of the essential facts under consideration which form the basis for the decision on whether to apply provisional and definitive measures. The full disclosure of essential facts is without prejudice to the requirements on confidentiality referred to in Article 6.5 of the Agreement on Anti-Dumping and Article 12.4 of the SCM Agreement. Such disclosure shall be made in writing, and should take place in sufficient time for interested parties to defend their interests.
3. The disclosure of the essential facts, which is made in accordance with paragraph 2 shall contain in particular:
(a) in the case of an anti-dumping investigation, the margins of dumping established, a sufficiently detailed explanation of the basis and methodology upon which normal values and export prices were established, and of the methodology used in the comparison of the normal values and export prices including any adjustments;
(b) in the case of a countervailing duty investigation, the determination of countervailable subsidisation, including sufficient details on the calculation of the amount and methodology followed to determine the existence of subsidisation; and
(c) information relevant to the determination of injury, including information concerning the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like goods, the detailed methodology used in the calculation of price undercutting, the consequent impact of the dumped imports on the domestic industry, and the demonstration of a causal relationship including the examination of factors other than the dumped imports as referred to in Article 3.5 of the Agreement on Anti-Dumping.
4. In cases in which an investigating authority (19) of a Party intends to make use of the facts available pursuant to Article 6.8 of the Agreement on Anti-Dumping, the investigating authority shall inform the interested party concerned of its intentions and give a clear indication of the reasons which may lead to the use of the facts available. If, after having been given the opportunity to provide further explanations within a reasonable time period, the explanations given by the interested party concerned are considered by the investigating authority as not being satisfactory, the disclosure of essential facts shall contain a clear indication of the facts available that the investigating authority has used instead.
Article 5.13. Consideration of Public Interest
When conducting anti-dumping and countervailing duty investigations on a good, the investigating authority of the importing Party shall, in accordance with its laws and regulations, provide opportunities for producers in the importing Party of the like good, for importers of the good, for industrial users of the good and for representative consumer organisations in cases where the good is commonly sold at the retail level, to submit their views in writing with regard to the anti-dumping and countervailing duty investigation, including concerning the potential impact of a duty on their situation.
Article 5.14. Anti-dumping Investigation
When the investigating authority of the importing Party has received a written application by or on behalf of its domestic industry for the initiation of an anti-dumping investigation in respect of a good from the exporting Party, the importing Party shall notify, at least 10 days in advance of the initiation of such investigation, the exporting Party of such application.
Chapter 6. SANITARY AND PHYTOSANITARY MEASURES
Article 6.1. Objectives
The objectives of this Chapter are to:
(a) protect human, animal or plant life or health through the development, adoption and enforcement of sanitary and phytosanitary measures while minimising their negative effects on trade between the Parties;
(b) promote cooperation between the Parties on the implementation of the SPS Agreement; and
(c) provide means for improving communication and cooperation between the Parties, a framework for addressing matters related to the implementation of sanitary and phytosanitary measures, and means for achieving mutually acceptable solutions.
Article 6.2. Scope of Application
This Chapter applies to all sanitary and phytosanitary measures of the Parties under the SPS Agreement that may, directly or indirectly, affect trade between the Parties.
Article 6.3. Definitions
1. For the purposes of this Chapter, the definitions set out in Annex A to the SPS Agreement apply.
2. For the purposes of this Chapter:
(a) "import conditions" means any sanitary or phytosanitary measures that are required to be fulfilled for the import of products; and
(b) "protected zone" means an officially defined geographical part of the territory of each Party in which a specific regulated pest is not established in spite of favourable conditions for its establishment and its presence in other parts of the territory of the Party.
3. In addition, the Committee on Sanitary and Phytosanitary Measures established pursuant to Article 22.3 may agree on other definitions for the application of this Chapter taking into consideration the glossaries and definitions developed by relevant international organisations, such as the Codex Alimentarius Commission (hereinafter referred to as "Codex Alimentarius"), the World Organisation for Animal Health (hereinafter referred to as "OIE") and the relevant international organisations operating within the framework of the International Plant Protection Convention (hereinafter referred to as "IPPC"). In the event of an inconsistency between the definitions agreed by the Committee on the Sanitary and Phytosanitary Measures and the definitions set out in the SPS Agreement, the definitions set out in the SPS Agreement shall prevail.
Article 6.4. Relation to the WTO Agreement
The Parties affirm their rights and obligations relating to sanitary and phytosanitary measures under the SPS Agreement. Nothing in this Chapter shall affect the rights and obligations of each Party under the SPS Agreement.
Article 6.5. Competent Authorities and Contact Points
1. As of the date of entry into force of this Agreement, each Party shall provide the other Party with a description of the competent authorities for the implementation of this Chapter and a contact point for communication on all matters covered by this Chapter.
2. Each Party shall inform the other Party of any significant changes in the structure, organisation and division of responsibilities of their competent authorities and ensure that the information on contact points is kept up to date.
Article 6.6. Risk Assessment
The Parties shall ensure that their sanitary and phytosanitary measures are based on risk assessment in accordance with Article 5 and other relevant provisions of the SPS Agreement.
Article 6.7. Import Conditions, Import Procedures and Trade Facilitation
1. Import conditions shall be established by the importing Party in order to achieve the appropriate level of protection, subject to and taking into account consultations between the Parties when necessary.
2. Without prejudice to the rights and obligations of each Party under the SPS Agreement, the importing Party should, if requested by the exporting Party, apply the import conditions for products to the entire territory of the exporting Party in a consistent manner.
3. Paragraphs 1 and 2 shall not affect the import conditions existing between the Parties on the date of entry into force of this Agreement. The Parties shall give consideration to any request for a review of those import conditions.
4. Each Party shall ensure, with respect to any import procedures to check and ensure the fulfilment of sanitary or phytosanitary measures, including those for the approval and clearance, that:
(a) such procedures are simplified, expedited and completed without undue delay, in accordance with the SPS Agreement;
(b) such procedures are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party;
(c) the standard processing period of each procedure is published or that the anticipated processing period is communicated to the applicant upon request; and
(d) information requirements are limited to what is necessary for appropriate control, inspection and approval procedures, including for the approval of the use of additives or for the establishment of tolerances for contaminants in food, beverages or feedstuffs.
5. Taking into account the applicable standards developed under the IPPC, the Parties shall maintain adequate information on their pest status, including surveillance, eradication and containment programmes and their results, in order to support the categorisation of pests and to justify phytosanitary import conditions.
6. Each Party shall establish lists of regulated pests for commodities (20) where phytosanitary concerns exist. The lists shall contain, as appropriate:
(a) the quarantine pests not known to occur within any part of its territory;
(b) the quarantine pests which are known to occur within any part of its territory but are not widely distributed and under official control; and
(c) any other regulated pest for which phytosanitary measures may be taken.
For commodities for which phytosanitary concerns exist, import conditions shall be limited to measures ensuring the absence of regulated pests of the importing Party. The importing Party shall make available its list of regulated commodities and the phytosanitary import requirements for all regulated commodities. This information shall include, as appropriate, the specific quarantine pests and additional declarations on phytosanitary certificates as prescribed by the importing Party.
7. Where it is necessary to establish import conditions to respond to a request of the exporting Party:
(a) the importing Party shall take all necessary steps to allow the import of the products concerned without undue delay;
(b) the exporting Party shall:
(i) provide all relevant information required by the importing Party; and
(ii) give reasonable access to the importing Party for audit and other relevant procedures.
8. Where a range of alternative sanitary or phytosanitary measures are available to attain the appropriate level of protection of the importing Party, the Parties shall, on request of the exporting Party, consider selecting a more practicable and less trade-restrictive solution.
9. Where a certificate issued by the exporting Party is required for sanitary or phytosanitary objectives, the format of the certificate and its contents shall be agreed by the Parties, taking into account international standards, guidelines or recommendations of the Codex Alimentarius, OIE or IPPC.
10. Each Party shall promote the implementation of electronic certification and other technologies to facilitate trade.
11. The purpose of the verifications by officials of the importing Party in the territory of the exporting Party should be to facilitate new trade. Those verifications should not become a permanent measure. The importing Party shall replace an existing verification measure by an alternative measure which verifies compliance with the agreed requirements for phytosanitary measures by the exporting Party, if so requested by the exporting Party and accepted without undue delay by the importing Party.
12. Consignments of regulated commodities shall be accepted on the basis of adequate assurances by the exporting Party, without specific import authorisations in the form of a licence or permit, except where an official consent for import is necessary, based on the relevant standards, guidelines and recommendations of the IPPC.
13. Pest risk analysis shall begin as promptly as possible and shall be concluded without undue delay.
14. Any fees imposed for the procedures on imported products from the exporting Party shall be equitable in relation to any fees charged on like domestic products and should be no higher than the actual cost of the service in accordance with subparagraph 1(f) of Annex C to the SPS Agreement.
Article 6.8. Audit
1. In order to attain and maintain confidence in the effective implementation of this Chapter, the Parties shall assist each other to carry out audits of:
(a) all or parts of the exporting Party's inspection and certification system; and
(b) the results of the controls carried out under the exporting Party's inspection and certification system.
The Parties shall carry out those audits in accordance with the provisions of the SPS Agreement, taking into account the relevant international standards, guidelines and recommendations of the Codex Alimentarius, OIE or IPPC.
2. The importing Party may conduct audits by requesting information from the exporting Party or by audit visits to the exporting Party.
3. An audit visit shall be carried out under the conditions agreed in advance by the Parties.
4. The importing Party shall provide the exporting Party with the opportunity to comment in writing on the findings of the audit. The importing Party shall take any such comments into account before reaching its conclusions and taking any action thereon. The importing Party shall, without undue delay, provide the exporting Party with a written report setting out its conclusions.
5. The costs for an audit visit shall be borne by the importing Party unless otherwise agreed by the Parties.
Article 6.9. Procedure for Listing of Establishments or Facilities
1. When required by the importing Party, the competent authorities of the exporting Party shall ensure that lists of establishments and facilities which comply with the importing Party's import conditions are drawn up, kept updated and communicated to the importing Party.
2. The importing Party may request the exporting Party to provide information which is necessary to consider the lists referred to in paragraph 1. Unless additional information is required to verify the entries on the lists, the importing Party shall take the necessary measures to allow imports from the listed establishments and facilities without undue delay. Without prejudice to Article 6.13, such measures shall not include prior inspection unless such inspection is required by each Party's laws and regulations or otherwise agreed by the Parties.
3. The importing Party may conduct audits in accordance with Article 6.8.